April 14, 2017
Dear Alpine Haven Property Owner,
The following is an update from the Alpine Haven Property Owners Association.
What is the status of Alpine Haven Property Owners Association, Inc (AHPOA)?
To understand the status of AHPOA, some history is helpful.
Starting in the mid-1960s, Hubert and Caroline Daberer developed the Alpine Haven Community as a for-profit venture. Prior to the 1996 buy-out from the Daberers by AHPOA, the owners association served primarily as an advisory group to the Daberers. During the 1990s, due to Hubert’s advancing age, the owners association explored the option of a buy-out of Alpine Haven from Hubert. The primary objectives were three-fold:
1) For property owners to control the operations and future of Alpine Haven,
2) For property owners to have control over fees, and
3) To avoid uncertainty should Hubert sell to a profit-motivated, investor buyer.
In 1996, AHPOA, by agreement of the property owners, approved the plan presented in the “Buyout Report to Property Owners.” The plan required those owners who had invested with Daberer in the recreation facilities, to forgo any return of their investment and release any ownership claims they might have. They did, and AHPOA completed the purchase of the common elements of the community (roads, trucks, equipment, maintenance garage, signs, pool, tennis court, park, green space and trails) and became the grantor to supply both deeded services (road maintenance, street lights, garbage collection) and non-deeded services (driveway plowing and recreational facilities) to the community.
Previously, as a for-profit venture and owner/manager, Hubert Daberer, expected to receive a salary, recover all overhead, and earn a profit/return on his investment. After the buyout, services have been provided to owners at cost and administered by an unpaid, volunteer board of directors elected by their fellow owners.
Since then, each owner, through participation in the association, not only has had a voice over the quality and level of service provided, each owner has had a vote to approve the annual budget and the annual fee. The annual fee being determined to be an equal share of the association’s total expenses.
In the beginning, the pool and tennis were optional, but soon they were made available to everyone for a “one fee for all”, that was similar or less than Daberer’s fee without recreation access. Over time, adjusted for inflation, AHPOA’s all-inclusive fee remained at or below the pre-buyout level of fees set by Daberer. In addition, the association established a reserve fund for emergencies and upgraded capital equipment. Clearly, by having the association own the assets and deliver the services, the owners have received more value for their fees.
Also, in the mid-1990s, the Vermont Legislature enacted Title 27a legislation for the purpose of regulating Common Interest Communities (CIC). Those regulations protect both the individual property owners and the association by providing rules by which owners and the association must abide. Today, few if any people would want to purchase a home in an unregulated community, and rightfully, state laws now prohibit developing a planned community such as Alpine Haven without an approved CIC plan in place.
Since our Alpine Haven community appeared to meet the criteria as a pre-existing CIC according to the Title 27a statutes, our association, in 2002, by majority vote of owners, confirmed AHPOA as a CIC. The CIC structure was affirmed again by the vote of Unit Owners in 2011, thus AHPOA became subject to the laws applicable to pre-existing CICs.
Unfortunately, a few owners did not agree. Over time, disputes by these owners over services and fees have resulted in lawsuits against the association. Hubert Daberer suffered similar suits during his ownership.
What is the status of our Alpine Haven community following the Supreme Court of Vermont (SCOV) ruling?
Previous, lower court decisions had ruled Alpine Haven to be either a pre-existing CIC or a CIC.
However, the SCOV recently over-ruled all previous court decisions when it determined that Alpine Haven is not a CIC. However, AHPOA is still recognized by the courts as the homeowners
association for Alpine Haven.
AHPOA is the legal owner of the common elements and remains the grantor responsible for providing services to property owners. AHPOA continues to fulfill its obligation to property owners as recently demonstrated by timely and effective clearing of roads during this heavy snow year.
AHPOA has the legal authority to set the fees. Those fees are determined through a democratic process.
Members elect directors, directors propose a budget, MEMBERS THEN VOTE TO APPROVE OR DISAPPROVE THE BUDGET.
All property owners have an obligation to pay a reasonable fee.
Although the SCOV found AHPOA is not a CIC, all property owners within Alpine Haven are still required to pay a “reasonable fee” for services. AHPOA believes the current fee is reasonable. Those in suit against AHPOA disagree. The question of “What is a reasonable fee?” was unanswered by SCOV and was remanded back to the trial court to resolve; however, Vermont law clearly states that a reasonable fee need not be limited to actual costs.
What is the impact on property owners?
AHPOA is a non-profit association. When an owner does not pay, or pays less, other owners must pay more to make up the deficit. The challenge is to determine a fee structure that will be reasonable for both members and non-members and assure the financial sustainability of the community.
While the determination by the court of what is a “reasonable fee” is important, the question of how we administer deeded and non-deeded services going forward is equally important. Currently your AHPOA board of directors is working to develop a two-tier fee structure corresponding to an owner’s status as either a member or non-member of the association.
What options do property owners have?
Owners may choose to be non-members or members of the association.
Non-members will receive only deeded services referenced in their deed and may expect a lower fee, but restrictions and conditions may apply.
Members will retain voting rights, thus giving them control over operations, election of directors, approval of budgets, and the approval of both member and non-member fees.
Additionally, members will continue to receive the non-deeded benefits of driveway plowing, access to recreational facilities, and any other benefits they may choose to add.
Understandably, members may expect a higher fee than non-members. However, both members and non-members should know, the biggest expense for the association is the cost and overhead associated with maintaining access, that is, the roads; and that expense should be borne equally by every owner.
Why did we continue to defend the lawsuit?
Under both the CIC structures of 2002 and 2011, and the non-profit corporate structure of 1996, the Board was both authorized by statute, and obligated, as fiduciaries of the members, to protect and defend the integrity of the community, in lawsuits.
Until recently, all previous court rulings involving Alpine Haven’s status confirmed that it was a Common Interest Community
Also, the vast majority of property owners believed this was a community where “we were all in this together”; and that all owners would pay the same fee and have access to the same services.
The founding concept of being good neighbors, sharing equally in a special community, persisted in the thinking and actions of your board of directors. We understood that not all owners use the services equally. Some weekend residents might use the pool more than some full-time residents; but by the same token, some full-time residents might put more demands on the roads than weekend residents; but everyone has equal access and opportunity.
All those who voted to approve the buy-out from Hubert, and all those who purchased homes in Alpine Haven since 1996, did so with the expectation that everyone shared equally in the obligation to provide and pay for services.
Finally, AHPOA did meet with litigants in efforts to negotiate settlements but were not able to do so.
The SCOV determination has provided final direction on how the association may proceed going forward.
The courts did recognize the 1996 Articles of Association and Bylaws, under which the association is currently operating. The board of directors is working on a proposal to 1), amend those bylaws to fulfill obligations to non-members, and 2), continue to provide owners who choose to be members the full benefits of the homeowners association, both in a financially stable manner.
We will be in contact you.
In Service to You,
AHPOA Board of Directors
For list of current directors and further information on Alpine Haven, its history, legal matters, and other topics, see AHPOA’s new website: alpinehaven.org